Multiple choices in capital budgetingcoffer co is analyzing

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Multiple choices in capital budgeting.

Coffer Co. is analyzing two projects for the future.Assume that only one project can be selected.

 

Project X

Project Y

Cost of machine

$68,000

60,000

Net cash flow: 

Year 1

24,000

4,000

Year 2

24,000

26,000

Year 3

24,000

26,000

Year 4

0

20,000

If the company is using the payback period method and it requires a payback of three years or less, which project should be selected? 

AProject X.
B. Neither X nor Y is an acceptable project.
C. Both X and Y are acceptable projects.
D. Project Y.
E. Project Y because it has a lower initial investment.

Reference no: EM13356079

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